\documentclass{standalone}

\usepackage{newtxtext,newtxmath}
\usepackage[T1]{fontenc}
\usepackage{tikz}
\usetikzlibrary{decorations.pathreplacing, angles, quotes, shapes, patterns, arrows.meta, bending, positioning}

\begin{document}
        \begin{tikzpicture}[scale = 0.8]
            \fill[gray!20] (0,0) -- (0,10)  -- (3.9475,10) -- (3.9475,0) -- cycle;
            \draw[white, pattern = crosshatch, pattern color = gray!20] (3.9475,0) -- (3.9475,10) -- (50/6,10) -- (50/6,0) -- cycle;
            \draw[thick] (0,10) node[left]{1}  -- (0,0) node[midway, left=25pt, rotate=90, anchor=center]{Low-Ability Incumbents' Policy Decision $\sigma$} node[anchor=north east]{0} -- (10,0) node[midway,below=20pt]{Incumbent's Prior Expected Ability $\kappa$} node[right]{1};
            \draw[smooth, variable = \x, thick, domain = 0:7.5, dashed, red] plot({\x}, {10 - (4/3) * ( (\x) / (10 - \x))});
            \draw[smooth, variable = \x, thick, domain = 7.5:50/6, dashed, red] plot({\x}, {(6/3) * ( (\x) / (10 - \x))});
            \draw[dashed, red, thick] (50/6,9.97) -- (10,9.97);
            \draw[smooth, variable = \x, thick, domain = 0:3] plot({\x}, {10 - (28/3) * ( (\x) / (10 - \x))});
            \draw[smooth, variable = \x, thick, domain = 3:50/12] plot({\x}, {(14) * ( (\x) / (10 - \x))});
            \draw[thick] (50/12, 10) -- (10,10);
            \draw[thick, dotted] (50/12,0) node[below=2.5pt, anchor=north, scale=0.75]{$\frac{\Bar{\kappa}}{\Bar{\kappa} + \left(1 - \Bar{\kappa}\right) \pi}$} -- (50/12, 10);
            \draw[thick, dotted] (50/6,0) node[below=2.5pt, anchor=north, scale=0.75]{$\frac{\gamma}{\gamma + \left(1 - \gamma\right) \pi}$} -- (50/6, 10);
            \draw[thick,-{Stealth}] (10.5,8) -- (10.5,2) node[midway, rotate=90, anchor=north, align=center,  yshift=-5pt]{More Policy Distortions};
        \end{tikzpicture}
\end{document}